US told to ‘urgently reinstate’ strategic economic talks as China war may paralyse West


Defence Secretary Lloyd Austin on defending Taiwan

The spy-chief warned that the UK needs to take immediate action to address and challenge China’s control of technology otherwise we will pay the price later.

However, as President Xi Jinping opened Party Congress on Sunday, he reiterated his goal of reunification by seizing back Taiwan and warned off “external forces” such as the US, directly putting China on a collision path with the West.

The Chinese President has vowed to achieve the reunification of China which he has now made his legacy and has said he will not hesitate to take it by force as tensions between China and Taiwan increase.

The US has resolutely sided with Taiwan and vowed to defend the self-governing island in the event of an attack from China.

However, a new report published by Dr Nicola Leveringhaus from Kings College London addresses the lesser discussed issue of economic relations as a method of negotiation before, during and after a conflict.

Speaking to, Dr Leveringhaus warned: “The US and countries like the UK could do more now to make themselves more resilient and counter-sanctions proof.

“China is certainly well on this path, with the war in Ukraine offering Beijing an open-book on how the EU and other Western states might use economic tools in a conflict.”

The report entitled ‘The Economics of Strategic Stability in US-China’ is published by the Norwegian Institute of International Affairs and warns that the West must immediately “get economics ready for future tensions between the US and China”.

As tensions continue to mount between the world’s two largest economies, the West must shift some of its focus away from military planning to economic strategy in which China is already making headway.

China has been able to learn many useful lessons from the ongoing war in Ukraine by observing reactions from the West towards Russia.

Joe Biden

The West must bring back economic strategic talks (Image: Getty)

Sir Jeremy Fleming

The GCHQ boss warned of the technology race (Image: Getty)

According to Dr Leveringhaus: “Beijing is closely studying how (and for how long) Western states can use economic tools for to counter or disrupt Russian actions in Ukraine.

“The slow pace of institutions like the EU for organising action (and the ability to disrupt collective action) will be key areas of interest in Beijing,” as will the support for the sanctions by other nations like Singapore.

The expert told the Express that though the US are analysing potential economic strategies against China in the event of war with Taiwan, “the strategic element of surprise has been lost in economic terms”.

Since February 2022, Beijing has held numerous high-level meetings to address and fill economic gaps that could be vulnerable to external pressures.

According to the report: “China has already started to adapt its business abroad to avoid secondary sanctions and is advising wealthy Chinese business figures how to best safeguard and secure their assets abroad.”

READ MORE: Biden blasted for criticising Truss’s economic policy

President Xi

President Xi opened party congress and reiterated goal of reunification (Image: Getty)

President of Taiwan

The US has vowed to defend Taiwan (Image: Getty)

Though there is a large global reliance on Russia for gas which the West had to back away from due to Putin’s invasion, the global reliance and influence China has is far more noteworthy.

The East Asia security and intelligence expert said: “Moscow does not have the global diplomatic, economic, and technological reach of China, in place for almost a decade through the Belt and Road Initiative.

“While China does not do formal military alliances, the economics of the Belt and Road have brought countries from across Latin America, the Pacific Islands to Africa, close into its orbit.

“Essentially, sanctioning China will have knock-on effects with its BRI partners, and in turn affect the efficiency of sanctions.”

The Belt and Road Initiative has given China a large global network of investments and financial assets, making it a key trading partner for nations across the globe and a vital key in supplies and manufacturing.

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The events in Ukraine have given Beijing an ‘open-book’ on the reactions from The West (Image: Getty)

China has been able to reinforce its economics and ensure that it is ‘sanction proof’.

The Kings College lecturer said that “economic relations matter for negotiations before, during and after a conflict and if well understood, they can potentially help to de-escalate and defuse a crisis.”

The report outlines the two advantages which China has over the United States, one being its ability to observe the Russia-Ukraine war and the other being psychology.

According to Dr Leveringhaus, China can use its previous experience of “economic wilderness” due to its fall out with the Soviet Union which led to “unprecedented international isolation, in economic, technology and diplomatic terms.”

The US does not have such a narrative it could use if it found itself in a similar economic state.


Taiwan and China have been conducting military drills as tensions escalate (Image: Getty)

It is also a narrative which the Chinese Communist Party may find beneficial “as a key mobiliser for hyper nationalism during a crisis against the United States in ways Washington is unlikely to replicate”, the expert said.

Since the Obama administration in the United States, the relations between the US and China have been worsening though the upkeep of such relations is vital for the stability of the global economy.

Dr Leveringhaus said: “A war between the United States and China over Taiwan would likely have greater economic consequences than the war in Ukraine.

“In a war over Taiwan, the consequences for global and regional economics will likely be wider and deeper.

“Yet the US and China currently have no track one senior level strategic talks on economic matters, these were abandoned in the Obama era.”

She added: “They need to be urgently re-instated. It is in everyone’s interest – the UK included – to get economics ready for future tensions between the US and China.”


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